Free Market Health Reform

https://www.futureofcapitalism.com/2015/08/free-market-health-reform

Grand Rounds, a four-year-old company that has raised $106 million in venture capital and counts Comcast, Costco, and Jamba Juice as clients, is the topic of an article in Bloomberg News.The company and others like it offer second opinions on whether costly surgery is actually necessary:

Grand Rounds Chief Executive Owen Tripp says about two-thirds of all its reviews lead to changes in diagnosis or treatment. The number "still shocks me," Tripp says. "Most of the frontline care we deliver today is either inadequate or ineffective."

Grand Rounds and its competition—companies such as Best Doctors, 2nd.MD, and Accolade—are trying to help employers deal with a problem that plagues American health care: wild deviations in care among different providers and regions. For example, patients in Bradenton, Fla., get a controversial spinal fusion surgery for lower-back problems almost 14 times more frequently than patients in Bangor, Me., according to data from the Dartmouth Atlas of Health Care, which tracks disparities in care.

That kind of variation is at least partly responsible for America's outsize medical costs, which are higher per capita than anywhere else. It's some combination of errors, differences in professional judgement, and a payment system that often creates incentives for doctors to prescribe treatments most lucrative for them.

The Bloomberg article reminded me of an earlier post here, Walmart Fixes Health Care, covering an Atul Gawande article in the New Yorker about the lesson from Walmart's experiment with channeling spine, heart, or transplant procedures for employees to six "centers of excellence" — the Cleveland Clinic; the Mayo Clinic; Virginia Mason Medical Center, in Washington; Scott and White Memorial Hospital, in Texas; Geisinger Medical Center, in Pennsylvania; and Mercy Hospital Springfield, in Missouri:

Two years into the program, an unexpected pattern is emerging: the biggest savings and improvements in care are coming from avoiding procedures that shouldn't be done in the first place. Before the participating hospitals operate, their doctors conduct their own evaluation. And, according to Sally Welborn, the senior vice-president for benefits at Walmart, those doctors are finding that around thirty per cent of the spinal procedures that employees were told they needed are inappropriate.

The idea in both instances is that a problem in capitalism — the profit motive of doctors to perform medically unnecessary procedures — can be fixed by more capitalism — the motive of employers to control health care costs and of other businesses to make money by helping businesses control health care costs. It's a different approach than the ObamaCare approach, which is that if your health insurance policy is too expensive we will make it even more expensive by slapping a "cadillac tax" on it, or take other steps to control health care spending on a top-down, national basis.